Got my copy of the new Reserve Fund AR. The Chairman's statement makes for comical reading in light of their going down in history as being the first MMF in this era to "break the buck":
The World’s Most Experienced Money Fund ManagerSM
After a recent speech a questioner asked what I would do if I was appointed Chairman of the
Federal Reserve. I responded that I would immediately resign and go back to being Chairman of
The Reserve. Here is why. We are at the flex point in our economy. Inflation pressures that were
apparent last summer are still present. Because of the crisis of confidence that emerged last year,
inflation fighting was put on hold, interest rates were dropped to protect the valuation of securities
and therefore the integrity of investment banks, commercial banks and some money market mutual
funds too as it worked out. Unfortunately, the crisis of confidence is not over but the market has
improved dramatically.
Many dangerously Structured Investment Vehicles (SIVs) were folded by their sponsors which
had the effect of taking matches from children that had proved themselves unworthy of the
responsibility, underscoring my earlier points that not anyone can run a money fund. One year has
passed since the subprime and SIV crisis shook the foundation of our markets, which has investors
questioning the safety of their money funds. Good!
We are pleased to report that you, and the markets in general, have embraced the very concept
and foundation on which The Reserve was founded, an unwavering discipline focused on protecting
your principal, providing daily liquidity and transparency, and all the while boring you into a
sound sleep. Experience has prevailed and as a result, The Reserve’s assets grew by nearly 100%,
or $61 billion, over the past year.
Thank you for the trust you have placed in us as your cash manager and in helping us be the
fastest organically growing money fund company, ranked among the largest U.S. money fund
managers (those with at least $40 billion in assets) in 2005, 2006 and again in 2007.* Please let us
know your comments and suggestions as to how we can serve you better.
Bruce Bent
Chairman & CEO
I'm guessing Bent is wishing he chose to retire last year. |
